Question

Required information [The following information applies to the questions displayed below.) On October 1. Ebony Ernst organized Ernst Consulting: on October 3, the owner contributed $84,580 in assets in exchange for its common stock to launch the business. On October 31, the company's records show the following items and amounts. Cash Accounts receivable Office supplies Land Office equipment Accounts payable Connon Stock $ 9,390 16,000 3,830 45,989 18,550 9,060 84,580 Cash dividends Consulting revenue Rent expense Salaries expense Telephone expense Miscellaneous expenses $ 2,650 16,000 4,190 7,570 83e 650 Using the above information prepare an October 31 balance sheet for Ernst Consulting

Answer 1

ERNST CONSULTING
Income Statement
Month Ended October 31
Revenues
Consulting Income	$16,000
		$16,000
Expenses
Rent Expenses	$4,190
Salaries Expenses	$7,570
Telephone Expenses	$830
Miscellaneous Expenses	$650
		$13,240
Net Income for the month		$2,760

ERNST CONSULTING
Income Statement
Month Ended October 31
Retained earnings, October 1	$0
Add: Net Income for the Month	$2,760
	$2,760
Less: Dividend Paid	$2,650
Retained earnings, October 31	$110

ERNST CONSULTING
Balance Sheet
October, 31
Assets	Liabilities
Cash	$9,390	Accounts Payable	$9,060
Accounts Receivable	$16,000
Office Supplies	$3,830
Land	$45,980
Office Equipment	$18,550	Stock holders Equity
		Common Stock	$84,580
		Retained Earnings	$110
		Total Stock holders Equity	$84,690
	$93,750		$93,750